Ondo urges SEC, CFTC to bring US stock perpetuals onshore

Ondo Finance is advocating for the introduction of perpetual futures tied to individual US stocks onshore, contending that current securities laws can accommodate such products without the need for new regulations. The company released three comment letters on Aug. 24 to the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) expressing this viewpoint.

Ondo's Panama-based entity already provides stablecoin-settled perpetual futures on individual stocks listed in the US, having recorded $8 billion in trading volume as of Aug. 14, six weeks after its inception. With a distributed value of $2.6 billion, Ondo ranks fourth among tokenized real-world asset (RWA) managers, according to RWA.xyz data.

Ondo argues that scheduled funding payments can align perpetual contracts with the price of their underlying stocks, serving a function akin to expiration in traditional futures. The company asserts that the statutory definition of a security futures product does not necessitate a fixed expiration date. Furthermore, many of the stocks backing offshore perpetuals are primarily traded on US exchanges, suggesting that bringing this activity back to the United States should be a priority for both regulatory bodies.

This proposal coincides with US regulators reevaluating how existing market rules apply to onchain products such as perpetual futures and tokenized securities.